topic Re: utilization in Credit Cards

utilization

laryn41 — Wed, 05 Sep 2007 13:38:13 GMT

is uti the % of what is used on each card or the % of the them all added together?

Re: utilization

SpecFile — Wed, 05 Sep 2007 13:52:11 GMT

util is the balances on all of your CCs combined divided by the CLs on all of your CCs combined.

EX: Card 1 CL=$ 500 Balance=$100

Card 2 CL=$1,000 Balance=$100

Card 3 CL=$ 500 Balance=$100

You have 3 CCs with CLs of $2,000 combined and they are carrying balances of $300 combined.

300/2000= 15% util

Message Edited by SpecFile on 09-05-2007 08:52 AM

Re: utilization

laryn41 — Wed, 05 Sep 2007 13:46:31 GMT

ok...so it's combined not each seperate has it's own utilization%

Re: utilization

laryn41 — Wed, 05 Sep 2007 13:47:45 GMT

store cards too?

Re: utilization

SpecFile — Wed, 05 Sep 2007 13:54:05 GMT

All revolving credit would be my assumption. You can always calculate each individual CCs util but your score is based off total util of all CCs.

Hope this helps!

Re: utilization

Anonymous — Wed, 05 Sep 2007 13:55:34 GMT

SpecFile wrote:
util is the balances on all of your CCs combined divided by the CLs on all of your CCs combined.

Specfile is correct, however, you want to keep an eye on the util for each individual card as well because some creditors will do soft pulls on a regular basis and take a look at your other cards individually to see if you are running high balances on any of them.

HSBC is good for that because it gives them the reason they need to invoke universal default and ratejack you. They did it to me although I have never missed a payment, have always paid more than the minimum and sometimes even PIF. But they said it was due to my balances with my other creditors. This of course was when I was young and naive.

No, actually, it must have been when I was naive because I can't remember when I was young.

Re: utilization

Anonymous — Wed, 05 Sep 2007 13:59:31 GMT

SpecFile wrote:
All revolving credit would be my assumption. You can always calculate each individual CCs util but your score is based off total util of all CCs.

Hope this helps!

SpecFile,

Since most store cards are considered charge accounts and not revolving credit, are they actually included in your util factor?

Sleigh17

Re: utilization

SpecFile — Wed, 05 Sep 2007 14:00:52 GMT

Absolutely right Sleigh. I didn't think about the soft pulls. Good advice!

Re: utilization

SpecFile — Wed, 05 Sep 2007 14:04:13 GMT

sleigh17 wrote:

SpecFile wrote:
All revolving credit would be my assumption. You can always calculate each individual CCs util but your score is based off total util of all CCs.

Hope this helps!

SpecFile,

Since most store cards are considered charge accounts and not revolving credit, are they actually included in your util factor?

Sleigh17

Hmmm. Now that you put it that way I don't see how they could. If you have to PIF each month how would they be able to determine util. on a charge card? I suppose they wouldn't include charge cards but that may not be accurate.

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:07:10 GMT

Be aware that FICO will take into account utilization on individual cards as well. A 90% maxed out card cancost you as many points as a collection

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:10:49 GMT

SpecFile wrote:

sleigh17 wrote:

SpecFile wrote:
All revolving credit would be my assumption. You can always calculate each individual CCs util but your score is based off total util of all CCs.

Hope this helps!

SpecFile,

Since most store cards are considered charge accounts and not revolving credit, are they actually included in your util factor?

Sleigh17

Hmmm. Now that you put it that way I don't see how they could. If you have to PIF each month how would they be able to determine util. on a charge card? I suppose they wouldn't include charge cards but that may not be accurate.

Actually, they are charge accounts and not charge cards (like AMEX Green, for example). I have a Macy's and a Target Redcard. Both are listed on my CR as "charge accounts", but I can make monthly payments unless of course I choose to PIF. I am unclear if they are included because of the monthly payments aspect or not included because they are considered a different animal? I'm so confused...more medication!LOL

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:12:29 GMT

Even though the Target and store cards are listed as 'charge account' the account type is usually revolving so it is factored into uti.

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:18:20 GMT

Brammy wrote:
Be aware that FICO will take into account utilization on individual cards as well. A 90% maxed out card cancost you as many points as a collection

Good morning Brammy,

What does the following quote from MyFICO mean?

"This credit usage ratio is one of the most important factors to your FICO score, so you should work on paying down your balances. Your FICO score looks at the ratio of revolving debt, but not in which accounts the debt resides. Therefore, consolidating or moving your debt from one account to another will usually not help your FICO score since the same total amount is owed."

I always thought because of that statement that FICO did not look at individual accounts for util, but at the whole. Am I reading it wrong? Inquiring minds want to know! LOL

Sleigh17

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:19:47 GMT

Brammy wrote:
Even though the Target and store cards are listed as 'charge account' the account type is usually revolving so it is factored into uti.

That's good to know. My store cards are at about 30%. Better get busy and send some money.

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:19:51 GMT

sleigh17 wrote:

Brammy wrote:

Be aware that FICO will take into account utilization on individual cards as well. A 90% maxed out card cancost you as many points as a collection

Good morning Brammy,

What does the following quote from MyFICO mean?

"This credit usage ratio is one of the most important factors to your FICO score, so you should work on paying down your balances. Your FICO score looks at the ratio of revolving debt, but not in which accounts the debt resides. Therefore, consolidating or moving your debt from one account to another will usually not help your FICO score since the same total amount is owed."

I always thought because of that statement that FICO did not look at individual accounts for util, but at the whole. Am I reading it wrong? Inquiring minds want to know! LOL

Sleigh17

I used to think so till I was correct by better minds than my own when asking abut maxing out an individual card to take advantage of a BT rate.

Re: utilization

SpecFile — Wed, 05 Sep 2007 14:25:17 GMT

What?????? I thought it was total for all cards not just one. Why do people open new TLs to drop their total util then?

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:27:07 GMT

Brammy wrote:

sleigh17 wrote:

Brammy wrote:
Be aware that FICO will take into account utilization on individual cards as well. A 90% maxed out card cancost you as many points as a collection

Good morning Brammy,

What does the following quote from MyFICO mean?

"This credit usage ratio is one of the most important factors to your FICO score, so you should work on paying down your balances. Your FICO score looks at the ratio of revolving debt, but not in which accounts the debt resides. Therefore, consolidating or moving your debt from one account to another will usually not help your FICO score since the same total amount is owed."
I always thought because of that statement that FICO did not look at individual accounts for util, but at the whole. Am I reading it wrong? Inquiring minds want to know! LOL

Sleigh17

I used to think so till I was correct by better minds than my own when asking abut maxing out an individual card to take advantage of a BT rate.

Thanks for the teaching me something new today. I actually (by accident) maxed out a card recently because of a 0% BT offer. I have since paid it down some, but I was trying to use the 0% while I paid down my other cards. I guess I had better watch out for that kind of thing in the future.

Re: utilization

SpecFile — Wed, 05 Sep 2007 14:28:22 GMT

Spec need meds stat!

Re: utilization

Anonymous — Wed, 05 Sep 2007 14:29:01 GMT

Still going to do it and recover later

Re: utilization

SpecFile — Wed, 05 Sep 2007 14:29:26 GMT

Yeah thanks for the knowledge Brammy! I was not clear on that either.